2012 Final Igu Un Ece Ngv Report 2012

7/22/2019 2012 Final Igu Un Ece Ngv Report 2012

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IGU International Gas Union

UN ECE United Nations Economic Commission forEurope

NATURAL GAS FOR VEHICLES (NGV)

June 2012

IGU WORKING COMMITTEE 5 UTILISATION of GAS

STUDY GROUP 5.3 NATURAL GAS VEHICLES (NGV)

and

UN ECE WORKING PARTY ON GAS

JOINT REPORT


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NATURAL GAS FOR VEHICLES IGU & UN ECE JOINT REPORT

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Table of Contents and Principals

1. Acknowledgements .............................................................................................................3

2. Introduction .......................................................................................................................... 6

3. Executive Summary .............................................................................................................9

4. Market Profile: World, Countinents, Countries ..............................................................12

Europe ............................................................................................................................. 13

Africa ............................................................................................................................... 35

Australia & New Zealand ................................................................................................ 37

North America ................................................................................................................. 39

South America ................................................................................................................. 54

Central America and the Caribbean ............................................................................... 59

Asia.................................................................................................................................. 61

5. Minimum Infrastructure Needs For Methane Refuelling Across Europe .................... 83

6. Environment and Emissions............................................................................................. 87

6.1 EU emissions policies and its impact on the European NGV market ...................... 87

6.2 Carbon Footprint Matrix & Potential Supply Scenarios of Alternative Fuels forTransports ....................................................................................................................... 93

7. Fuelling and Operation Technologies ...........................................................................100

7.1 Fuelling of LNG/L-CNG vehicles ............................................................................ 1007.2 Best practices: NGV fuelling stations ..................................................................... 104

7.3 LNG as a bunkering fuel ......................................................................................... 128

7.4 LNG is the sustainable fuel also for aviation .......................................................... 133

7.5 Fuelling technologies. Natural gas Blends Technology Gas Hydro ................... 136

7.6 From concept to reality: smart transition to clean alternative fuels ....................... 145

7.7 Promising NGV related technologies to enhance efficiency and safety ................ 149

7.7.1 Hybridization ................................................................................................... 150

7.7.2 Higher loads .................................................................................................... 1517.7.3 Dual Fuel Technology ..................................................................................... 154

7.7.4 Supercharging / Turbochargingg .................................................................... 154

7.8 Synergy of biomethane and natural gas ................................................................ 157

7.8.1 Production of biomethane (incl. various origins & various processes) .......... 157

7.8.2 Biogas valorisations & their environmental benefits ...................................... 165

7.8.3 Renewable natural gas (RNG) / biomethane in the USA ............................... 177

7.9 Rfid Safety System ................................................................................................. 180

7.10 Case Studies ........................................................................................................ 1857.10.1 Lille and the French case.............................................................................. 185


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7.10.2 First public LCMG filling station in Sweden .................................................. 193

8. Natural Gas Vehicle Market In 2010 2020: Development Trends ............................200

Appendices:

Appendix I: GasHighWay Project .............................................................................211

Austria ...................................................................................................................... 213

Check Republic........................................................................................................ 224

Estonia ..................................................................................................................... 233

Finland ..................................................................................................................... 238

Germany .................................................................................................................. 247

Itlaly .......................................................................................................................... 262

Poland ...................................................................................................................... 278

Appendix II: Blue Corridors On Our Planet .............................................................293

Appendix III: Worldwide NGV statistics ...................................................................307

Appendix IV: Abbreviations.......................................................................................316

Appendix V: References.............................................................................................321

Appendix VI: S.G. 5.3 Study Group Members and Partners ..................................325


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1. ACKNOWLEDGEMENTS

The acknowledgements are extended to all members of 5.3 Study Group and Partners whohave contributed by their materials, knowledge, advice, comments, and personal attendanceat the meetings for preparation of this Report, and especially:

Special thanks to Eugene Pronin (Gazprom / NGVRUS) for Chapter 3: Executive Summary;Chapter 4: Market profile: world, continents, countries, Chapter 8: Gas Vehicle Market In2010 2020: Development Trends and Appendix I: Country data base.

Special thanks to Davor Matic (OMV Gas Adria) for Chapter 4: Market profile: world,continents, countries, Chapter 8: Gas Vehicle Market In 2010 2020: Development Trendsand for Appendix I: Country data base.

Special thanks to Manuel Lage (General Manager of NGVA Europe) for Chapter 4: Marketprofile: world, continents, countries; Chapter 6: EU emission policies and its impact on theEuropean NGV market; Chapter 7.1: Fuelling of LNG/L-CNG vehicles; Chapter 7.7.4:Supercharging / Turbochargingg; 7.7: Promising NGV related technologies to enhanceefficiency and safety; Chapter 7.10.2: First public LCMG filling station in Sweden andChapter 8: Gas Vehicle Market In 2010 2020: Development Trends.

Special thanks to Jeffrey Seisler (Clean Fuels Consulting, Belgium) for Chapter 4: Marketprofile: world, continents, countries, Chapter 7.2 Best practices: NGV fuelling stations,Chapter 7.7: Promising NGV related technologies to enhance efficiency and safety andChapter 7.7.3: Dual fuel technology.

Special thanks to Peter Seidinger (OMV Gas&Power GmbH) for Chapter 7.2: Bestpractices: NGV fuelling stations.

Special thanks to Trevor Fletcher (Hardstaff Group, UK, Westport Innovations Inc) forchapter 7.7.3: Dual fuel technology.

Special thanks to Lee Giok Seng (Asia Pacific Natural Gas Vehicles Association) forAppendix III: Blue corridors on our planet.

Special thanks to Andrey Andreevsky (Gazprom, Russia) for Chapter 3: Executive Summary;Chapter 4: Market profile: world, continents, countries; Appendix I: Country data base and

Appendix II: Blue corridors on our planet.Special thanks to Rich Kolodziej (NGV America / IANGV) for Chapter 4: Market profile: world,continents, countries.

Special thanks to Nuno Moreira (Dourogas, Portuga)l and Jorge F. G. de Figueiredo(APVGN - Associao Portuguesa do Veculo a Gs Natural, Portugal) for Chapter 4: Marketprofile: world, continents, countries.

Special thanks to Ilmars Bode (LatviasGaze, Latvia) for Chapter 4: Market profile: world,continents, countries.

Special thanks to Gitautas Tevialis (Lietuvos duyos, Litva) for Chapter 4: Market profile:world, continents, countries.


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Special thanks to Mrs. Barbara La Licata, Fabio Sagnelli and Mrs. Paola Zitella(ENVIRONMENT PARK S.p.A.) for Chapter 4: Market profile: world, continents, countriesand Appendix I: Country data base.

Special thanks to Matthias Maedge (EU Affairs Manager of NGVA Europe) for Chapter 6.1:EU emission policies and its impact on the European NGV market.Special thanks to Dr. Antonio Nicotra (Managing Director Air-LNG GmbH (Bonn), GeneralManager Gasfin Investment SA (Luxembourg)) for Chapter 7.4: LNG is the sustainable fuelalso for aviation for Chapter 7.5: Fuelling technologies. Natural gas blends technology gas hydro and for Appendix III:Carbon Footprint Matrix & Potential Supply Scenarios ofAlternative Fuels for Transports.

Special thanks to Olivier Bordelanne (GDF Suez) for Chapter 7.8: Synergy of biomethaneand natural gas.

Special thanks to Karen Hamberg (Westport Innovations Inc.) for Chapter 7.8.3: Renewablenatural gas (RNG) / biomethane in the USA.

Special thanks to Valery Nemov (Gazprom Eksport) for Chapter 7.3: LNG as a bunkeringfuel.

Special thanks toG. Miletto, E. Volpi (Metatron); M. Ferrera, A. Gerini (Fiat PowertrainTecnologies); A. Fuganti (Centro Ricerche Fia) for Chapter 7.5: Fuelling technologies.Natural gas blends technology gas hydro.

Special thanks to Viridis Technologies Inc. for Chapter 7.9: RFID safety system.

Appendix I. Country data baseSpecial thanks to Flavio Mariani (ENI Gas & Power, Italy); Eugene Pronin (Gazprom,Russia); Andrey Andreevsky (Gazprom, Russia); Davor Matic (OMV Adria, Croatia); IANGV;Dr Garth Harris (Secretary General, International Association for Natural Gas Vehicles); Pi larPerez (NGVA Europe); Barbara La Licata, Fabio Sagnelli, Paola Zitella, (ENVIRONMENTPARK S.p.A.); Heimo T. Blattner (Steirische Gas-Wrme GmbH); Birgit Baumgartner (GrazerEnergieagentur); Pavel Novak (Czech Gas Association); Ahto Oja (Mnus Minek SEES);Jyvskyl Innovation Oy, Jyvskyl Innovation Ltd; Francesco Bazzoffi, Maurizio Cocchi(ETA FLORENCE); Agencja Rozwoju Regionalnego (S.A. w Bielsku-Biaej RegionalDevelopment Agency in Bielsko-Biaa); Instytut Paliw i Energii Odnawialnej Institute for Fuels

and Renewable Energy; Mrs. Irina Malenkina (Gazprom VNIIGAZ); Ms. AnastasiaPonomareva, (Gazprom VNIIGAZ); Mehak Gabrielian (Golden Field); Dmitry Anniuk,Alexander Holubau (Beltransgaz); Latvjas Gaze; Ivan Garch (Moldovagas), VyacheslavAsriyan (ArmRosgazprom), Guitautas Tevialis (Lietuvos Dujos), Valdo Vaker (AS EestiGaas).

Special thanks to R.Fernandes (ALGNV Latin America NGV Association), Lee Giok Seng,Executive Director, ANGVA for Appendix II: Blue corridors on our planet.

Special thanks to Claudio Kohan (NGV Communications Group) for Appendix III: WorldwideNGV statistics.

The partners contribution to Chapter 7.2: Best practices: NGV fuelling stations, isaknowleged at the end of the Chapter.


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Editing

Special thanks to Eugene Pronin and Andrey Andreevsky (Gazprom), Alexander Popov andAndrey Evstifeev (Gazprom VNIIGAZ) for their time and efforts spent in providing overalleditorial support in preparing the final versions of this document.

Continity of the study

Global NGV market keeps growing. Each year new technologies, regulations, governmentstrategies and business scenarios are developed and introduced. The purpose of this Reportis to investigate these recent developments achieved during the 2009 2012 Triennium,draw conclusions, prepare recommendation and present them to the world gas industry.However, global, regional and national NGV markets have a range of constant inherentfeatures that should be traced back into history in order to examine near and mid term futuretrends. These trends are a reliable indicator of the future NGV business course. Due to thislink between past and future readers may find in this Report certain repetition of the previous2003 2006 and 2006 2009 NGV Study Group Reports. This is unavoidable, although alldata are updated as of December 2011. Thus continuity of the study is assured.The specifity of this new study is represented by the fact that it is a result of the joint effort of

two international organizations: International Gas Uninon and Economic Comission forEurope of the United Nations.Such joint effort was due to the following. In January 2010 the 20thsession of the UN ECEWorking Party on Gas has decided to prepare a study on use of natural gas in transport inthe UN ECE region. To an extent this study was meant as a follow-up of the study on theBlue Corridor Project published in 2002.The first coordination meeting of participants was hosted by Gazprom VNIIGAZ in Moscow inspring 2010. Taking into account that almost identical topics are considered within theInternational Gas Union by basically the same groups of NGV experts, participants of theMoscow meeting have proposed to make one joint NGV study instead of two. Such synergywould allow avoiding an ineffective duplication of work as well as saving time and resources.This proposal has also been supported by the IGU Working Committee 5 and by the

Chairman of the IGU Coordination Committee.This explains some emphasis made in the present study on the CNG/NGVs situation and themarket prospects in the European countries and in the UN ECE region in general, e.g. thedescription of the state and prospects in the countries participating in the GasHighWayproject, as well as the NGVA Europe position paper on Minimum infrastructure needs formethane (ng/biomethane) refuelling across Europe.


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Scope of the report

Unless otherwise specified the term Natural Gas Vehicle (NGV) in various combinations(NGV market, NGV legislation, NGV equipment etc.) in general is related methane-basedfuels: compressed and liquefied natural gas and bio-methane as well as associatedtechnologies, politics and business.

Geographical division of the world

For the purposes of this Report geographical sub-regions of the World are purelygeographical not political areas of macro-regions divided so by the United NationsStatistics Division of the United Nations Department of Economic and Social Affairs (DESA).

Geographical Sub-Regions of the World

Countries subject to this report

Only those countries are subject to this report where natural gas vehicles and NGV relatedinfrastructure are available NGV according to the best knowledge of the S.G 5.3 Study GroupMembers and Partners as of December 2011. If some countries are missed in this Report, itis a matter of nothing but simple unawareness of the team.NGV related infrastructure isunderstood to mean filling stations, mobile refueling units, conversion shops, cylinderrequalification facilities, training centers and other integral elements of the national NGVmarket.The following geographical sub-regions and countries are subject to this report:


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AFRICANorthern Africa Eastern Africa Western Africa

Algeria Mozambique Nigeria

Egypt TanzaniaTunisia United Arab Emirates

AMERICANorth America South America Central America Caribbean

Canada Argentina Mexico Dominican Republic

USA Bolivia Panama Trinidad and Tobago

Brazil

ChileColumbia

Ecuador

Peru

Venezuela

ASIACentral Asia Southeastern

AsiaSouthern

AsiaWestern

AsiaEastern

Asia

Armenia Indonesia Bangladesh Turkey ChinaGeorgia Malaysia India Japan

Kazakhstan Myanmar Iran SouthKorea

Kirghizia Philippines Pakistan

Tadzhikistan Singapore

Turkmenistan Thailand

Uzbekistan Vietnam

AUSTRALIA & NEW ZEALANDAustralia

New Zealand

EUROPENorthern Europe Eastern Europe Southern Europe Western Europe

Estonia Byelorussia Bosnia andHerzegovina

Austria

Finland Bulgaria Croatia Belgium

Great Britain Czech Republic Greece France


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Northern Europe Eastern Europe Southern Europe Western Europe

Iceland Hungary Italy Germany

Ireland Moldavia Macedonia Lichtenstein

Latvia Poland Montenegro Luxemburg

Lithuania Russia Portugal Netherlands

Norway Slovakia Serbia Switzerland

Sweden Ukraine Spain

Eugene Pronin, Andrey Andreevsky, Gazprom, Russia

The present Final Report has been prepared due to valuable contributions of the membersand partners of IGU Study Group 5.3 listed above.

The aim of the publication is to reflect the changes in the field of use of natural gas in itsdifferent kinds occurred in the world since the last Report published in 2009.

The peculiarity of this document is represented (as it was mentioned in the Introduction) bythe fact that this is a joint effort of two important international organizations and their experts:International Gas Union and the United Nations Economic Commission for Europe (UN ECE).

This reason explains the structure of the Report.The main part of it is represented by the Market Profile, i.e. a global overview of NGVsituation in different continents and countries of the world.

The world statistics show the 12 times growth of NGVs compared to 2000, i.e. from 1.2million to 14.55 million of vehicles. During the period considered in this Repot the leadershipin NGVs development has passed from Latin America to Asia. Pakistan leads in the worldwith 2.85 M NGVs and large governmental program supporting the development in the field.

The more spectacular dynamics showed Iran, India and China.

Iran with more than 17% share of natural gas resources in the world has superior conditionfor substituting common liquid fossil fuels by natural gas.Partially unexpectedly it has cached

up with the leading group and takes the worlds second place with 2.85 M NGVs and 1800filling stations.

In India the use of gaseous motor fuels receives a large governmental support. Thegovernment has made a list of 201 cities where CNG and LPG facilities would be installed inthe coming years. Due to this support India takes now the 5thplace in the world with 1.1 MNGVs. Although many of NGVs are converted after-market vehicles.

China also can be considered as one of the newcomers of the NGV market. The availabilityof natural gas in China is growing year by year due to the completion of significant domesticpipeline infrastructure projects that connect to neighbouring countries pipelines. Likewise,the amount of imported LNG in coastal areas of Southeast China is steadily increasing. Thisrelatively recent abundance of natural gas provides the backdrop for the development and

growth of NGV usage in China. Now there are in total 600.000 NGVs and 2.500 natural gas


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refuelling stations in China. These figures are increasing rapidly each year, encouraged bymore than 60 NGV car makers (OEMs) that have developed in China.

The Market Profile presents a wide picture of legal conditions and governmental support (or

lack of support) of NGVs development existing in different countries. It shows the maintechnological trends in production of methane vehicles, high pressure cylinders, refuelingand other equipement.

If compared to the privious Final Reports, this one contains some material showing the useof natural gas in transport under a new aspect. In Chapter 7.3 there is an arcticle: "LNG as abunkering fuel", which discribes the ships refuelling technologies, infrastructure developmentand environmental effect. In Chapter 7.2: "Best practices: NGV refuelling stations" there is adetailed analysis of CNG refuelling stations operation prepared through questioning theexperts working in this field in different countries.

Some space of the Report is dedicated to substantial analytical materials concerning themain conditions and prospects of NGV market development. In large part they are

represented by position papers provided by NGVA Europe, such as: Minimum infrastructureneeds for methane (ng/biomethane) refuelling across Europe; EU emissions policies and itsimpact on the European NGV market.

The first article is based on the premise, that taking into account the great environmentalbenefits being related to natural gas and biomethane and despite the fact that more andmore ex-factory methane driven vehicles are being introduced to the European market place,the market share of CNG and LNG vehicles is still rather small, now making up close to 1million vehicles in the EU, which is making up a market share of only 0.4 % of the totalrunning fleet. And it offers some ways of improving the situation.

The second concerning the EU emission policies stresses that a market share of 20% ofnatural gas in transport fuels would allow a 5% reduction of the CO2 emissions from allEuropean vehicles. Assuming that 20% of the gas used would be made up of biomethane,the CO2reduction would increase to 7%. European emission policies are clearly andincreasingly supporting NGVs and will remain the main driver for further market developmentof CNG and LNG vehicles.

The Report contains some important materials concerning new technologies, especiallybiomethane and hydrogen: Synergy of biomethane and natural gas; Natural gas blendstechnology gas hydro; From concept to reality: smart transition to clean alternative fuels;Promising NGV related technologies to enhance efficiency and safety.

By 2030 natural gas consumption in the European Union should increase by around 16%.With the supply of natural gas becoming ever more dependent on imports, the papersevaluate the possible contribution that substitute products such as biomethane could make tosatisfy the future demand for natural gas.Today, natural gas and biomethane represent the most practical, realistic and easiest way toreduce pollution coming from road transportation. At the same time, Hydrogen as a vehiclefuel certainly is an interesting solution taking into account its environmental benefits.However, to be realistic, fully propelled hydrogen vehicles still remain an insecure long termoption facing various obstacles, which must be solved first: open questions include e.g.production pathways with regard to coherent pollution, energy and cost dimensions; theorganization and realization of a dedicated distribution network; the complexity and cost ofhydrogen vehicles and their main components, etc.As a consequence, the presented papers are intended to present the huge potential thatmethane/hydrogen blends can bring for the transport sector, as an ideal bridge to a more

sustainable mobility, by using the existing NG/biomethane distribution infrastructure.


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Some interesting examples of use of natural gas in transport are shown in the case studies:Lille and the French caseand First public LCNG filling station in Sweden.

The main conclusions and prospects for the future are summarised in Chapter 8 entitled

Natural Gas Vehicle Market In 2010 2020: Development Trends.The Appendices of the Report include some special information.

Due to the UN ECE cooperation within the preparation of the Final Report some emphasis ismade on the situation in the UN ECE countries. That is why the first Appendix is dedicated tothe European GasHighWay project and contains a detailed description of situation in theparticipating countries as well as the prospective location of filling stations.

The project is co-financed by the European Commission under the Intelligent Energy Europe, a part of the EU's Competitiveness and Innovation Framework Programme (CIP).The aim of the project is promoting the uptake of gaseous vehicle fuels, namely biomethaneand CNG, and especially the realization of a comprehensive network of filling stations for

these fuels spanning Europe from the north, Finland and Sweden, to the south, Italy.The main objectives of the project are: increase of the general awareness of target groups inthe use of natural gas vehicles (NGVs), increase the supply of NG/biomethane by boostingthe investments in distribution systems for these alternative fuels and in biogas productionand biogas upgrading to enhance NGVs demand.

Due to the fact that the Blue Corridor concept becomes reality the second Appendix isdedicated to examples of the functionality of the concept. Its vita lity is shown first of all byNGVs rally organized in different parts of the world: in Europe, in Latin America and Asia.Their aim was to attract the attention of local authorities, car manufacturers, mass media andgeneral public to the benefits of introducing natural gas into engines.

The last Appendix is dedicated to the world NGV statistics traditionally provided by NGVCommunications Group.

In general the experts of the joint IGU / UN ECE study have come to the followingconclusions concerning the prospects of NGV market development.

Natural gas with its environmental, economic and availability advantages will remain theonly alternative to oil and diesel in the short and medium prospective. Only natural gas isfully technically and economically applicable in any transportation means: on-road vehicles,scooters, heavy duty vehicles, ships, aircrafts, locomotives, etc.

The average rate of the world NGV fleet growth reached 15% in the last decade of the pastcentury, and 26% in the 21stcentury. With the average growth of 18% the world NGV fleetwill reach 60 million by 2020. According to the conservative energy development scenario, by2020 the methane share in the bulk of motor fuels will reach 11% in Asia, 12% in Americasand 14% in Europe. The world gas consumption in transport is expected to increase f rom 20bcm in 2010 up to 40-45 bcm in 2030. The coming decades will show the dramatic growth ofuse of liquefied natural gas and liquefied biomethane.

The alleged deficit of natural gas is not really foreseen. The World Energy Outlook 2011published the last November by the World Energy Agency states that the Gold Age of naturalgas is coming. The total recoverable reserves of natural gas will last for about 250 years withthe present rate of consumption. Such forecast opens wide prospects for natural gas as a

motor fuel.


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4.

Collected by: Mr. Davor Matic, OMV Adria, Croatia; WOC 5.3; UN ECE NGV Expert Group(with updates by WOC 5.3 / UN ECE NGV Expert Group members and partners)

The purpose of this chapter is to provide description of national and regional marketdevelopments since 2009. In other words it should provide an insight to the market profilessince end-2009 (when previous WOC 5 report was published) onwards with an aim to cover:

key drivers affecting the market(s), availability of OEMs and increased conversions, new supportive measures (or counter-supportive) introduced, new programs / plans / projects of interest realized / under development / announced, new legislation issued, strategic documents issued etc.

Statistics, economics and technology is described more in details in the other chapters.

For the purposes of this Report geographical sub-regions of the World referred to in thisReport are purely geographical not political areas of macro-regions divided so by theUnited Nations Statistics Division of the United Nations Department of Economic and SocialAffairs (DESA).

Geographical Sub-Regions of the World

Only those countries are subject to this report where natural gas vehicles and NGV relatedinfrastructure are available NGV according to the best knowledge of the S.G 5.3 Study GroupMembers and Partners. If some countries are missed in this Report, it is a matter of nothingbut simple unawareness of the team (or the data unavailability regarding latestdevelopments).


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EUROPE

The European Commission adopted in March 2011 a comprehensive strategy (Transport2050) for a competitive transport system set out to remove major barriers and bottlenecks inmany key areas across the fields of: transport infrastructure and investment, innovation andthe internal market. The aim is to create a Single European Transport Area with morecompetition and a fully integrated transport network which links the different modes andallows for a profound shift in transport patterns for passengers and freight. To this purpose,the roadmap puts forward 40 concrete initiatives for the next decade.

The Transport 2050 roadmap sets different goals for different types of journeys within cities,between cities, and long distance.

For intercity travel: 50% of all medium-distance passenger and freight transport shouldshift off the roads and onto rail and waterborne transport.

For long-distance travel and intercontinental freight, air travel and ships will continue todominate. New engines, fuels, and traffic management systems will increase efficiencyand reduce emissions.

For urban transport, a big shift to cleaner cars and cleaner fuels 50% shift away fromconventionally fuelled cars by 2030, phasing them out in cities by 2050.

Halve the use of conventionally fuelled cars in urban transport by 2030, phasing themout in cities by 2050, and achieve essentially CO2-free movement of goods in majorurban centres by 2030.

Methane is part of the EU strategy for the future of transport outlined in the final draft of thereport of the European Expert Group released on January 2011. After the efficient vehiclesstrategy, the European Commission has sketched out for the second time in a few monthsthe advantages that natural gas vehicles can bring in the attempt to make transport cleanerand less dependent on oil. To reach this target, the expert group says that alternative fuels,such as electricity, hydrogen, natural gas and biomethane, biofuels and LPG, should beavailable EU wide with harmonised standards, to ensure EU-wide free circulation of allvehicles and should benefit of harmonised and EU-wide incentives. Concerning methane,the document underlines that building additional refuelling stations to ensure widespreadsupply and that setting harmonised standards for bio-methane injection into the gas grid areabsolute priorities. In particular the expert group underlines the need for an infrastructuredevelopment plan and stresses how investments in the sector can pave the way for further

environmental improvements: The gas grid can be made available also for bio-methanefeed-in to allow for a smooth change-over from fossil to renewable methane gas sources. Ina 2030-2050 perspective, bio-methane could account for a considerable part of the totalvolume of methane used in Europe and the total potential of bio-methane supply iscomparable to the total present natural gas consumption of the EU. According to EUexperts, methane gas vehicles can play an important role in urban and medium distancetransport in the medium term and natural gas and biomethane should be promoted as oneof the main fuels in heavy urban transport. This is one of the many elements suggested byand inserted into the draft report.

Thanks to the strong intervention of NGVA Europe, the European Commission proposal forraising minimum taxation levels for natural gas already in 2015, has been modified. It nowallows member states to apply exemptions in taxes for natural gas used as a vehicle fueluntil 2023, and according to the proposed amendment to Article 15 (i), the member state can,


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but is not obliged, to make use of this possibility. This in part means that one of NGVAEurope main political postulations not to raise any taxes at least for 10 years from now hasbeen accepted. Nevertheless and at the same time, it should be noted that this newapproach is not enough coherent under NGVA Europe point of view, taking into account thatnatural gas vehicles are still a niche market in most European countries, and also thestrategic and environmental benefits associated to its use. The environmental impact of eachfuel and the fact that natural gas is the cleanest alternative is therefore being disregardedand also the consideration of the market share aspect as suggested by NGVA Europe hasnot been picked up. The Commission appreciated NGVA Europe concise contributions,including its f inal statement.

Following the main recommendations from the Expert Group of Future Transport Fuels, theEuropean Commission officially introduced the 5thFP7 call for 2011/2012 research,innovation and demonstration projects. One of the transport related calls is on theDemonstration of heavy duty vehicles running with liquefied methane to promote LNG Blue

Corridors on medium and longer distances. The project will be part of the European GreenCars initiative, which is one of the three PPP (Public Private Partnership) included in theCommissions recovery package, and is designed as a large scale project having a total EUfunding of 8 million Euro (total funding for road transport related calls is 37 million out of 150million allocated to FP7). In this partnership 50% of all related costs will be refundable. NGVEurope has been encouraged to come up with a concrete proposal to carry out and co-ordinate the LNG Blue Corridors project and is inviting interested partners (manufacturers,fuel suppliers, operators, cities/regions as well as possible end-users; transport and logisticcompanies).

The main objective of the project is to initiate a European network for sustainable roadtransport by tackling non-technological barriers to the production of Liquefied BioMethane

(LBM), expansion of supply routes for LNG, and the use of LNG in heavy goods vehicles.This will be done through an analysis and development phase, followed by pilot projects andthe initiation of a European network of production/refuelling facilities. The high autonomy(600 to 800 km) of the long distance LNG trucks will reduce the number of the minimalnecessary filling stations to a relatively small number. Going to real numbers, the aim wouldbe to install in Europe a minimum of 10 new LNG/LBG filling stations, strategically situated,and able to give service in the different main routes to not less than 50 to 100 LNG heavytrucks. The analysis will be aimed at determining the member state and European marketbarriers. In addition, the differences in legislation, taxation and subsidy programmes will beinvestigated throughout Europe by the project partners. Moreover, recommendations will beformulated for European policy makers. Finally, an effort will be made to normalise andstandardise the various technologies related to both, LMB production and application in

methane vehicles using LNG.

Taking into account that today the Iberian Peninsula is the part of Europe with more LNGterminals, imagined are three initial LNG Blue Corridors:

1. Portugal, Spain, France, Belgium, The Netherlands and UK

2. Portugal, Spain, France, Germany, Denmark and Sweden

3. Portugal, Spain, France, Italy, Slovenia, Croatia

A fourth transversal corridor could link UK, The Netherlands, Germany, Austria, Russia;taking advantage of the filling points for the previous ones. An additional inland waters

corridor going up the river Danube will link Romania up to Vienna.


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Within the pilot projects, LBM production and identifying strategic supply routes of LNG forapplication in heavy goods vehicles will be demonstrated in partner countries and severalregions being interested to apply the LNG concept in heavy goods transport, functioning as aconnector to other regions and big European cities using the same principle, thus creatingthe LNG Blue Corridors. All pilot projects results will be monitored and disseminated topotential users.

The EU has set out an ambitious strategy to reduce CO2emissions from road vehicles andmuch has been achieved already. Regulation (EC) No 443/2009 setting emissionperformance standards for new passenger cars requires a fleet average emission of 130 gCO2/km for new passenger cars to be fully achieved by 2015. Industry will need to investeven more in emission reduction technologies, including smart traffic managementtechnologies, and further improve engine efficiency. This requirement could be achievedmuch sooner, however by increasing the proportion of natural gas vehicles. This wasrevealed in a recent study carried out by the CAR-Center Automotive Research at the

University of Duisburg-Essen. According to its results, NGVs provide the ideal bridgingtechnology into the age of electric vehicles; no other technology will allow us to reduceovernight the harmful CO2emissions of the vehicles at such a low cost due to the lowemissions of natural gas fuel, which can be reduced even further by the addition of bio-methane. According to the authors this would enable the target for 2020 to be achieved fiveyears earlier.

Moreover a Commission proposal to reduce CO2emissions from light commercial vehicles(vans) is currently being discussed by the Council and Parliament. It proposes a f leetaverage emission for all new vans of 175 g/km as of 2016.

The EU has also reduced emissions of pollutants such as particulate matter and NO xby

setting ever stricter standards. Euro 6 limits for cars and vans and Euro VI for heavy-dutyvehicles will apply as of 2014. Even though petrol and diesel combustion engines willbecome less dominant in the 2020 perspective, every means available must be used toreduce their negative environmental impact.

Type-approval for road vehicles has been extended to cover all propulsion systems with theaim of removing potential regulatory barriers and to ensure that alternative propulsionvehicles are at least as safe as conventional ones. Therefore, common rules have alreadybeen set out for hydrogen powered vehicles, gas fuelled vehicles and biofuels. Commonrequirements are needed for electric vehicles too.

Regulation 2009/33/EC requires contracting entities and public and private operators to take

into account lifetime energy and emissions impacts (costs) when purchasing road transportvehicles for fleets. It does not prevent the choice of retrofitted vehicles upgraded for higherenvironmental performance. As an additional instrument to help the implementation of thisdirective, European Commission launched a new website, http://www.cleanvehicle.eu, tohelp consumers and public authorities to choose the cleanest and most eff icient vehicle, soto make the best choice that can help to save money in the medium and long term. Beyondall the information on the costs and the emissions of vehicles, from passenger cars to lightand heavy duty vehicles to buses, the Portal provides information on public procurementrules and incentives schemes for clean and energy-efficient vehicles on EU level and in allMember States. The increase of sales will help reduce costs through economies of scale andwill result in progressive improvement in the energy and environmental performance of thewhole available fleet.


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Regulation 2009/28/EC on the promotion of the use of energy from renewable sources issetting mandatory share of energy from RES in transport; at least 10% of the finalconsumption of energy in transport of member state by 2020. It includes also biomethaneinjected into the grid. Member states were obliged to prepare National Renewable EnergyAction Plans (member states national targets) until June 30rd2010.

Regarding the off-shore applications, use of LNG in ships is gaining momentum.

The European Commission has published a report, in mid-July 2011 saying that sulphurdioxide emissions have to be cut by as much as 90 percent and particle emissions by 80percent before January 2015. In particular, the decrease in the allowed maximum level ofsulphur content of maritime fuels should be stronger in sensitive areas such as the EnglishChannel, the North Sea and the Baltic Sea, from 1.5% to 0,1%. In other areas the reductionin sulphur contents will be from the current levels of 4.5% to 0.5% by January 2020.According to the report, projections made in 2005 showed that without further regulatory

action, the continued growth in emissions of sulphur dioxide and nitrogen oxides from themaritime sector will surpass total emissions of these pollutants from all land-based sourcesby 2020. The Group of experts indicated the way forward explaining how achievement ofthese standards can be via purchase and use of low sulphur fuels, and also throughalternatives fuels and stressing that there is an increate interest in LNG as a fuel, especiallyfor those ships carrying cargo across short distances. In particular, using LNG would enablesuch ships to comply with the requirements and also remain competitive with other modes oftransport.

The Danish Maritime Authority (DMA) is heading an EU project with the aim to makerecommendations for creating a framework for the establishment of a maritime LNGinfrastructure in the Baltic Sea, the North Sea and the English Channel. The framework,

involving the fulfilment of a feasibility study and test of recommendations, is to be consideredalong two dimensions: a hard dimension with maritime LNG filling stations and a soft onewith regulation, classification rules and industrial standards and cooperation, etc. The projecthas been formed in response to the recent IMO (International Maritime Organization)regulation on shipping sets limits on sulphur and nitrogen oxide emissions from 2010, 2015and 2016 (the 2016 provisions). The recommendations are to target central stakeholders forthe establishment and use of an LNG infrastructure encompassing technical as well aseconomic issues. Central stakeholders mean ship-owners, ports, LNG providers, industryorganizations, states, the EU and the IMO, etc. The EU project description states that theuse of LNG seems an obvious alternative to meet the environmental demands in acompetitive way. But the absence of an LNG infrastructure for supplying LNG to ships that issupported by regulation, industry standards, etc. does not make this alternative viable. The

recommendations will address LNG infrastructure from a supply chain point of view, from thereception of LNG and/or liquefaction of natural gas f rom the natural gas grid, via storage anddistribution of LNG to the use of LNG in ships for propulsion. The project is co-financed bythe EU and is strategic in relation to the implementation of Motorways of the Seas accordingto article 12A of the TEN-T (Trans-European Network) Guidelines on Motorways of the Seas.

Country by country overview (based on the available data) is presented bellow.


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NORTHERN EUROPE

DENMARK was until recently country without any NGVs or CNG stations (a very late pieceof positive news is the advent of the first public CNG station). Danish situation is a problemconsidering refuelling needs in NGVs trying to travel between other Nordic countries tocontinental Europe. The background is the Danish taxation of natural gas used as a vehiclefuel which makes CNG as expensive as diesel and petrol.

ICELAND is the only NGV country fully dependant on biomethane. New laws were passedby the Icelandic parliament in December 2010 and enforced on 1stJanuary 2011 that reflectsa systematic change in taxation on motor vehicles and fuels. No longer will motor vehicles inIceland be taxed based on engine size or total weight of but instead based on documentedemission of CO2/km of fossil origin. Both the excise duty and VAT have been placed onmotor vehicles in Iceland in the past but the %-range for the excise duty have been widenedplacing an added cost on vehicles releasing GHG, of fossil origin, over 160 gr/km. Bio-fuels

will carry a VAT of 25.5% as before but the new law confirms that a special fuel fine that isplaced on petrol and diesel will not be placed on bio-methane or bio-diesel for some years tocome. The new law provides for the ability to import vehicles, capable of using bio-methaneas a primary fuel, without paying an excise duty up to the maximum deduction of 1,250,000kr (app. 7,900 EUR). The deductions apply for all bi-fuel vehicles with two fuel tanks, amethane tank and a petrol tank, as well as dual-fuel cars (methane/diesel). Also, the new lawplaces a bi-fuel car and a dual-fuel car in the lowest category for the annual vehicle-fee,5,000 kr/year (app.31 EUR/year), as opposed to a high as 73,800 kr/year (app. 466EUR/year) for each passenger car. This will apply regardless of how the car becameregistered as a bi-fuel or dual-fuel car. Finally, the new laws confirmed that the governmenthas no intent in placing a special fuel fee on bio-fuel usage in transportation in Iceland.

In IRELAND national gas company, Bord Gis has launched a report on The Future ofRenewable Gas in Ireland. The report outlines how grass and waste can be converted intonatural gas that can then be used locally or piped into the national grid for distribution aroundIreland. The report estimates that 7.5% of Irelands natural gas demand could be met byrenewable gas. Bord Gis, which is currently trialling OEM NGVs in its f leet, uses Swedensbiomethane industry to show what is possible for natural gas vehicles.

The situation and prospects of CNG/NGVs in LATVIAare considered in the Chapterconcerning the European GasHighWay Project. The main statistic data look as follow. Withthe total number of on-road vehicles of about 700 thousand units the number of NGVsamounts only to 18, with one CNG filling station in the country. The major CNG f illing stationoperator is Latvjas Gaze. The average prices for motor fuels: CNG (EUR/m3) 0.38; oil

RON95 (EUR/l) 1.32; diesel (EUR/l) 1.28.

In LITHUANIAwith the total fleet of on-road vehicles exceeding two million units it has 195NGVs and 3 CNG filling stations. No incentives are offered by the state, and the fuel pricesdo not differ so much: CNG: 0.88 /Nm3; gasoline95: 1.32 /l; diesel: 1.24 /l.

Recent developments in SWEDENare targeted primarily in the direction of use of liquefiedmethane and especially biomethane in heavy-duty applications.

Clean Air Power (CAP) reported to deliver eleven dual-fuel systems to Volvo BusCorporation under a new supply agreement. The agreement follows on from thedevelopment agreement signed with Volvo Bus Corporation in July 2010 which stated thatthe companies would jointly develop the installation of dual-fuel systems on existing busengines. These eleven dual-fuel systems will be fitted directly onto the buses on the Volvo


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production line and these buses are expected to be in service in Sweden by July 2011. Dueto this positive environmental impact, this project is receiving considerable support from theSwedish government who are contributing almost SEK 24 million (US$ 3.54 million) offunding towards the project through the Swedish Energy Agency. Further to this agreement,the company is in follow-on discussions with Volvo Bus Corporation regarding the jointdevelopment of dual-fuel engines for the next generation of Volvo Buses and bus chassis.This supply agreement is separate from the supply agreement signed with Volvo Powertrainin July 2010, and represents a further extension to the relationship which began in 2007. 1

In parallel, Volvo Trucks initiated testing of the dual fuel trucks developed under theagreement with CAP. Field tests started in 2010 with a mixture containing 70 percentmethane gas. Series production was scheduled to get under way in August 2011. The VolvoFM MethaneDiesel will initially be sold in Europe. First off the mark will be the Netherlands,Great Britain and Sweden, where the gas infrastructure is best established. At present thereare plans to build about 100 trucks in 2011. The new Volvo FM MethaneDiesel is offered with

a 13-litre engine producing 460 horsepower. The fuel consists of up to 75 percent liquefiedgas and the rest diesel, but the proportions can vary depending on how the vehicle is used.When liquid methane and diesel are used in a ratio of 75-25 percent, a truck performing longhaul or intercity duties has an operating range 500 to 1.000 km, depending on drivingconditions. Volvo Trucks has also started retailing in Sweden of refuse trucks and distributiontrucks using a 7-litre engine fitted with a Hardstaff QVM dual fuel solution 80 units hadalready been sold in November 2011..

Business Region Gteborg, together with industry and transport authorities, has receivedSEK 23.95 million (US$ 3.3 million) in Energy Agency funds for demonstration projects forlong-distance biomethane trucks and bus. The project aims to produce a strong market-ratealternative to diesel-powered heavy vehicles. AB Volvo and Volvo Buses are the OEM

project participants. The project uses the term BiMe a reference to methane gas engine(MDE) technology using compressed and liquefied biomethane. Liquefied biomethaneinfrastructure is being expanded to allow the use of LNG trucks. The projects will developbiogas technology in all its various stages production, distribution and automotive part thereby allowing for heavy vehicles to meet the tough environmental standards being set forthem now and in the future. This development of BiMe trucks and buses is described ashaving a unique potential to develop a market for heavy duty vehicles powered by liquidbiomethane in Sweden and open up environmental technology export opportunities. SEK 19million will be invested in the development of an energy-efficient MDE truck engine. Theprojects goals include 67 long-distance heavy duty trucks being powered by liquidbiomethane and at least three filling stations, one each in Gteborg, Stockholm and Malm.Truck project participants are AB Volvo, along with the leading biogas suppliers in Sweden,

AGA, Eon and FordonsGas. Business Region Gteborg, which includes Energas Swedenand Biogas West, is the project manager. The project is co-funded by the Vstra Gtalandregion. SEK 4.95 million will be invested in the development of an energy-efficient MDE busengine suitable for regional transportation, aiming to have 20 biomethane-powered buses onthe road by project end.

1CAP has formally signed a Supply Agreement with Volvo Powertrain and a separate DevelopmentAgreement with Volvo Bus Corporation. The new Supply and Development Agreement, initially for fiveyears, has been signed with Volvo Powertrain, a subsidiary of AB Volvo. It follows 3 years of closecooperation on a product development partnership and supersedes the Letter of Intent signed inJanuary 2009. CAPs OEM product will be marketed and supported by Volvo Truck Corporation. The

testing in commercial operation was set to begin in 2010 and initially take place in UK, Sweden andThailand.


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Three filling stations for liquefied methane gas have been planned in Sweden to date.Besides the completed one in Gteborg, Aga will open a filling station in Stockholm, and Eonwill open one in Malm. Volvo Trucks is a partner in all the projects (there are tentative plansto build some 20 additional stations to provide an adequate nation-wide coverage)..

Scania has been granted SEK 30 million (US$ 4.4 million) by Swedens Strategic VehicleResearch and Innovation Initiative (FFI) to develop a biofuel (alcohol and/or methane based)engine intended for heavy commercial vehicles. The company will focus on developing anengine using sustainable biofuels that will combine the high energy efficiency of diesel(compression ignition) technology with the more eff icient exhaust after-treatment system ofOtto (spark ignition) technology.

In the LDVs segment, somet three years after the withdrawal in 2006 of Volvos popular bi-fuel CNG/gasoline range, a Volvo bi-fuel model again became available. The company is

backing conversions from Alternative Fuel Vehicles (AFV), a privately-owned Gothenburgbased company, which has started converting the Volvo V70 model into a bi-fuel version.Canadian Westport Light Duty in the autumn of 2011 purchased AFV. The Volvo V70 2.5 Bi-Fuel, is based on Volvos current V70 model. The converted Volvo will be insured andfinanced the same way as other Volvo cars in Volvia and Volvo Financial Services. Thebuyer will also receive the usual 24-month new car warranty. The only difference is that AFVwill take over responsibility for the product after the conversion. The Nordic branch ofJapanese carmaker Subaru plans to produce vehicles in Sweden. Subaru Nordic plans toconvert its midsize Legacy and crossover Outback models to CNG system. Although thecompany is confident that there is interest for more than 2.000 units of these vehicles, it hasnot yet determined the number of cars that will be manufactured because it is awaiting agovernment decision on company car income tax priviledges after 2012. The cars would be

sold in Finland and the rest of European market.

Latest status concerning incentives and supportive measures (end 2011) for methane use intransport sector in Sweden is as follows:

40% reduction of taxable value of benefit via the free use of company cars is for NGVstypically worth Euro 900 annually in tax savings.

Priority lanes for gas fuelled taxi-cabs at airports, railway stations, and ferry terminalsmeans much reduced time waiting for a new passenger and thus higher earnings.

A number of municipalities offer free or reduced cost parking for NGVs.

Annual road tax is about one third of the tax on petrol fuelled vehicles. Previous large annual road tax advantage (some 3-400 EUR) compared to diesel

vehicles now, unfortunately, only valid when comparing with diesel vehicles older thanfive years.

Many municipalities (also various private companies looking to improve their greenimage) give priority to CNG cabs or other NGVs when ordering taxi services or othertransportation jobs.

Various incentives in support of new bio-methane production units, not only conventionalAD plants, but also projects aiming to gasify forest industry waste and reform into bio-methane.


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Fuelling cost advantage for Otto engine NGVs on average up to 24% in comparison with useof petrol and up to some 10% in comparison with more fuel efficient diesel vehicles. Fuellingcost advantage for methane used in dual fuel trucks above 20%.

Technology development in NORWAYand FINLANDis lately concentrated on the off-roadmarine applications using LNG. The overview bellow is tackles also marine developments inother countries.

Norwegian Torghatten Nord has ordered four LNG ferries from the Polish Remontowashipyard in Gdansk. This order is additional to four earlier ordered ferries now being built byRemontowa. Two new Fjord Line cruise ferries, to be built at Bergen, may be fitted with dual-fuel LNG engines. LNG/LBG considered for future ships plying the Gotland to Swedishmainland routes. GDF Suez subsidiary Cofely develops use of LNG/LBG fuelled ferry for useon Dutch Harlingen-Terschelling/Vlieland route. Norwegian NSK shipping has ordered anLNG fuelled coastal general cargo vessel to be built in Tersan (Turkey) with delivery in 2012.

Viking Line on October 25

th

, 2010, announced the intention to order a 240 million LNG ferryfor delivery in early 2013 from the STX Finland shipyard in Turku. The ship will be used onthe Stockholm-Turku route. The ferry has on overall length of 210 metres and a grosstonnage of 57.000. The top speed is 23 knots, and the ship will hold 2.300 passengers, and acrew of 200. The deal also includes an option on a sister ship. The Indian Bahrati Shipyardwill build two LNG powered RoRo vessels for Norwegian Sea-Cargo. Norwegian shipbuilderKleven Maritime has signed a new contract with Rem Offshore, fishing and supply shippingcompany based in Fosnavg, for delivery of a LNG-powered offshore vessel, scheduled fordelivery in December 2012. STX Norway Offshore has entered into three separate contractsin recent days to build LNG-powered platform supply vessels (PSVs) scheduled for deliveryin 2012.

Finlands Wrtsil Corporation, a ship power solution provider, has received an order fromEidesvik Offshore for LNG Platform Supply Vessel (PSV) to be Eidesviks f ifth LNG-poweredPSV. The vessel will be fitted for use in arctic waters with winterization and de-icingsolutions, and is to be built at Kleven Verft in Norway. The dual-fuel units enable, in additionto heavy fuel oil (HFO) and marine diesel oil (MDO), the use of gas as a main fuel for marineapplications. Furthermore, Wrtsil is cooperating with Korean Samsung Heavy Industries,the world second largest shipbuilder, concerning a new LNG powered container vesseldesign. The intention is to jointly develop next-generation ships with efficient and competitivepropulsion machinery concepts that meet or exceed the demands of future environmentalregulations, especially relevant in Emission Control Areas (ECAs). In gas mode, this dual fuelengines already complies with the IMOs Tier III regulations which come into force in 2016.Wrtsil earlier on November 2010 signed an MoU regarding future cooperation with the

Russian United Shipbuilding Corp. for joint developments of ship designs and propulsionsystems. Wrtsil and Deltamarin (designers of cruise ships and ferries) in a joint pressrelease on October 2010 announced their co-operation concerning dual fuel powered ferriesintended for traffic in the North American coastal waters.

The Norwegian transport corporation Fjord1 has entered into a contract with Norwegian-registered Fiskerstrand BLRT AS to plan and construct what is said to be the worlds largestgas-powered ferry. The run for the records in this segment (see the section on Francebellow). The ferry will run on LNG and will be delivered on 30 November 2011. The newLNG-powered ferry is designed by Multi Maritime AS in Frde and will have a total length of130 metres and a capacity of 242 cars and/or 22 lorries in combination with cars. It will hold600 passengers including staff. Maximum speed is to be around 20 knots. Following thesuccess of the worlds first ferry to run on natural gas with MF Glutra in 2000, Fjord1 is stillthe only company using natural gas ferries for vehicle and public transportation with five


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more large vessels operating the busy links along the busy coastal roads of Norway. Fjord1will by the end of 2011 have 12 gas ferries in operation along the Norwegian coast, makingthe company a world leader.

The 25,000 dwt product tanker Bit Viking was the first vessel ever to undergo a conversionby Wrtsil from heavy fuel oil to liquefied natural gas (LNG) operation. The unique fuelconversion of the product tanker Bit Viking, from heavy fuel oil to gas operation, has beenfinalised and in October 2011.

As regards the on-road situation in Finland, detailed overview can be found in the GasHigway project report in the Appendix of this report.

In Norway, a comprehensive report entitled Biogas as Fuel for Buses, prepared by HOGEnergy and signed off in December 2010, proposes that for climate and environmentalreasons Norway should focus on biogas as fuel for buses. An interim report resulted in the

City Council in Bergen deciding to build a biogas plant with sewage sludge as raw materials,and build up an extensive infrastructure for natural gas. Over 80 buses now operate onnatural gas in that city. New gas buses are used in Trondheim (third largest town in Norway),and biomethane is in use as a fuel in Oslo.

In the UNITED KINGDOMIveco is extending its line-up of natural gas powered heavy dutytrucks in the UK and Ireland with the launch of a new range of Stralis rigids and tractor unitsdesigned to run on LNG. Clean Air Power has received a purchase order from a globalmanufacturer of construction equipment to develop a dual-fuel Snow-Blower demonstrator tobe delivered to Stockholm airport, Sweden. Under the terms of the agreement, CAP willconvert two 9 litre engines with the purpose of demonstrating the efficiency and cost savingcapabilities that its technology offers end users. To this effect, the target is to reach a 50%

substitution level, which is the measure of energy substituted by gas. The demonstration wasdue to be completed by May 2011. End 2009, Optare plc, a bus designer and manufacturerbased in the United Kingdom, has reached an agreement with the Hardstaff Group giving itexclusive rights to the Hardstaff OIGI (Oil Ignition Gas Injection) dual-fuel conversion systemfor use in both new and existing passenger service vehicles. Buses using the injectionsystem will achieve carbon reduction levels in excess of 50% of those from a conventionaldiesel only bus when utilising biomethane derived from landfill gas or anaerobic digestion.These buses would also be eligible for the Governments Green Bus Grant.

Coca-Cola Enterprises will be delivering its branded soft drinks to the London 2012 OlympicGames (of which it is an official sponsor) on trucks fuelled by biomethane as part of a drive tocut carbon emissions within its fleet operations.

WESTERN EUROPE

In AUSTRIAthe CNG network saw a fast growth of public CNG network since 2009. Basedon a Five Point Action Program to Promote Natural Gas/Biomethane as Automotive Fuelsigned by OMV and Austrian Minister for Environment in June 2006 Austrian gas industryinvested heavily in the needed infrastructure. Whereas in March 2008 the opening of the100thpublic filing CNG filling station had been celebrated, only one year later, in November2009 the number of public CNG sites reached 150. Per end of 2011 in Austria 171 publicCNG sites cover the whole country, with focus on major cities (19 CNG site in Vienna) andmain roads.

Incentives for NGV are still limited: for new cars a tax reduction up to 600 can be achieved


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and some gas companies support new NGVs with a one time incentive.

M. Stohl has been driving his CNG rally car very successfully in Austrian Rally Championship.With 1st, 2nd and 3rdplace in overall results in the last 3 competitions sponsored by FGWAustria he showed a great performance. FGW as Austrian association of gas industry hadhis 2010 image campaign fully dedicated to NGVs.

Some companies starting tests with HD NGV to reduce the CO2-footprint in delivery.

For more details see also report on Gas Highway project in the Appendix of this report.

Additional information is also available on FGW homepage (http://www.erdgasautos.at/in German language only, but with lot of information including maps).

BELGIUM is improving natural gas fuel highway connections with its neighbours Germanyand the Netherlands. Two of planned four unmanned CNG refuelling facilities (providerDats24) have been opened in 2010, in the Antwerp port region, and two more were plannedfor completion by the end of 2010. Additionally there are plans for another four stations in thenear future. Currently, Belgium has only a handful of CNG filling stations, but soon it shouldbe possible in refuel NGVs in Antwerp, Anderlecht, Ninove and Halle.

In FRANCE, a joint ministry (Ecology, Economy and Budget) statement in France hasdeclared several changes to the 2011 ecological bonus-malus scheme which sets incentivesfor purchasing low-emission vehicles. The government says the bonus-malus, which wasinitiated in 2008, has fully met its objectives by encouraging buyers of new vehicles tochoose low CO2models. Declaring their goal achieved, the government has removed thebonus for buying a natural gas vehicle from 1st January 2011. Reduced bonuses remain inplace however for purchasers of low-emission vehicles in general, including any NGVs that f itwithin the approved emission brackets. The average CO2emissions per kilometer for newvehicles changed from 149 grams in 2007 to 131 grams in 2010, representing a 12%reduction of CO2emissions from automobiles, placing France at the top of Europeancountries according to the ministerial statement. This improvement was also accompanied bya significant decrease in fuel consumption.


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Renault Trucks is continuing to expand its Clean Tech Natural Gas offering. As acomplement to its refuse collection version (RCV) introduced in autumn 2010. RenaultPremium Distribution NGV is now available in France, Spain, Switzerland, Italy, Belgium, theNetherlands and Norway. Renault Trucks is also planning to update its NGV offering on theMidlum. The Renault Trucks NGV range is mainly designed for urban or suburbanapplications by captive fleets in distribution activities (of fresh or dried goods), street cleaning,industrial or domestic waste transport as well as for the collection of waste requiring a boomarm, such as glass. With reduced noise level, which can be as much as 2 dB, fleet managerscan extend their vehicles operating hours, using it earlier in the morning and later in theevening.

In the off-road segment, French ferry operator, Brittany Ferries, and shipbuilder, STX France,are embarking on a joint project to develop a new generation of environmentally-friendlypassenger ferries. Powered by dual-fuel engines, which will burn LNG combined with a highefficiency electric propulsion system, the new vessel will reduce energy consumption and

CO2emissions by 15 20% compared to current ferries. Furthermore, pollution by nitrousand sulphurous oxides will be almost eliminated. The new ship is planned to be able toaccommodate 2,400 passengers, 650 cars and 40 lorries and have a maximum speed of 25knots. The vessels structure will make use of lighter compound materials and high strengthglues, together with advanced hull design.

The Government of LUXEMBOURGhas set up the premium CAR-e and the premium CAR-eplus funding schemas aiming to promote the CO2reduction of car traff ic. The premium e-CAR is a f inancial support of the state of 750 EUR, and is aimed at people who havepurchased a car that fulfils the following CO2emission limits/standards:

120 g/km (160 g/km, under certain conditions, i.e. for NGV) when the car from 31stJuly

2010 is registered for the first time. 110 g/km (160 g/km, under certain conditions) when the car from 1stAugust 2010 is

registered for the first time.

To get the benefit of the premium e-CAR the first registration of the cars in the followingperiods has been held:

Between the 1st June 2007 and 31stDecember 2010, when the owner is a "personnephysique".

Between the 1stJune 2008 and 31stDecember 2010, when the owner was a personnemorale de droit priv".

The premium is doubled to 1,500 EUR if the car's CO2emission limit of 100 g/km does notexceed and is registered in the course of 2010 for the first time. A latest modification on theschema reduces the threshold of CO2emissions from 120 g/km to 110 g / km as from 1

stAugust 2010. The amount of 750 will continue to apply, as the threshold of 160 g/km forlarge family cars, electric cars, hybrid or gas cars.

In NETHERLANDSthe Ministry of Infrastructure and Environment, has set aside 2.6million (US$ 3.79 million) in grants for the purchase of new company cars that run on greengas, biogas and higher blends of biofuels. The program starts July 1 st2011 and is aninitiative of the ministry to encourage companies, water authorities and research institutions

to use of clean fuels while reducing CO2emissions and the use of fossil fuels. The pilot grantprogram for sustainable mobility: biogas and higher blends of biofuels, will run from July 1sttoDecember 30rd, 2011. A minimum of three new commercial vehicles (passenger cars or


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vans) per application. The grant is 3.000 (US$ 4.370) per car and up to 100.000(US$ 145.700) per project. The cars must be purchased ready to operate on clean fuels orbe converted to operate on clean fuels immediately upon delivery. In the Netherlands FiatNatural Power vans are being offered at the same price as diesel models and with free greengas (biomethane) in collaboration with regional gas supplier OrangeGas, for the first 10.000km.

In the heavy-duty LNG segment, Vos Logistics, together with Mercedes-Benz Nederland,LNG Europe, Van Gansewinkel and Indox CryoEnergy Spain, has taken the initiative toenable trucks in the Netherlands to run on LNG. The group has collaborated on the first LNGfilling station in mainland north-west Europe. Vos Logistics is planning to replace a significantpart of its distribution fleet with LNG trucks if economically feasible, beginning with 50 to 100trucks. Rolande LNG B.V. (Rolande), a Kaatsheuvel-based specialist in supplying LNG andliquefied biogas (LBG) for road transport applications, has facilitated in early 2010 what couldbe the first heavy-duty mono-fuel truck in Europe to run on liquid biomethane. Working in

close cooperation with IVECO in the Netherlands, Rolande brought the concept to reality byconverting an IVECO Stralis CNG to run on LNG/LBG. It is currently being used todemonstrate and convince the transport industry of the many advantages of using LBG asfuel. In July 2011, Volvo Trucks has delivered the first FM model dual fuel trucks to logisticstransporters (Wezenberg Group and Dasko Group) and Jumbo Supermarkets.

LNG fuelled river boat transport is paving the way in Netherlands. In end 2011 a 5,600 dwtmotorized barge was delivered in the Netherlands. This ship will travel up and down theRhine river as far as Basle in Switzerland.

In GERMANYthe government has outlined its new long-term energy strategy for thepromotion of natural gas and biomethane as a fuel for vehicles. Under the tit le of The

Challenge of Mobility, the government clearly states: The Federal Government supports thegrowing sales of natural gas vehicles. It p lans to continue indefinitely the tax concession fornatural gas as part of its drive to reduce greenhouse gas emissions. The strategiccommitment by the federal government is intended to provide long-term planning security forgas suppliers and vehicle manufacturers and will further boost the market. Also for gasstation operators, this is seen as an important signal to continue to invest in alternative fuel.

Deutsche Energie-Agentur (DENA German Energy Agency) has released the results of astudy entitled Enhancing the role of natural gas and biomethane in transport: concept for aroadmap process. Amongst an array of findings it recognises that in Germany transport isstill over 90% dependent on oil, while CO2emissions from transport have only been reducedby about 6% since 1990. The study contains recommendations for several courses of action,

aimed at greater uptake of natural gas vehicles and recognition of the potential contributionof natural gas and biomethane toward achieving Germanys CO2reduction goal over 40%across all sectors by 2020. Recommendations for action focus on vehicle offers, fuel supplyinfrastructure, taxation, and price display, ending with a strategy for development of aRoadmap process.

Since January 2011, Daimler AG offers a natural gas version of the E-class, following onfrom the very successful B-class. The 4-cylinder engine produces 120 kW (or 163 hp) andreaches a top speed of 224 km/h. the developers have managed to reduce gas consumptioncompared to its predecessor. On average, the Mercedes E 200 NGT BlueEFFICIENCY onlyrequires about 5.5 kilograms of natural gas per 100 kilometres. This not only results in lowerfuel costs but also in a much improved carbon footprint. According to the manufacturer, CO2emissions are 149 grams per kilometre. Around 360 kilometres can be covered with natural


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kilometre on CNG and almost nil using biomethane. It is anticipated the Meta engine willemulate the performance and running smoothness of comparable diesel and gasolineengines. Based on the Meta-owned technology the 2-piston-engine will be about 25-35%lighter compared to conventional combustion engines of the same performance; it will behighly charged and optimized regarding efficiency.

In end-April 2010 German automotive technology company MBtech Group showcased aninnovative natural gas combustion engine for medium-duty commercial vehicles. Thecompany is developing a CNG driven in-line combustion engine with a 6 liter capacity andturbocharging especially for medium duty commercial vehicles. The engine must fulfilparticularly strict requirements: in comparison to other current six cylinder diesel engines forMD vehicles it should be considerably more compact and lighter while also offeringsignificant advantages with regard to mechanical friction loss. At the same time MBtechsengineers have set themselves the goal of achieving at least the same power and torqueratings despite running on CNG and having two cylinders less. The four-cylinder CNG engine

is also prepared to fulfill the upcoming, stricter exhaust gas regulations.Opel, Robert Bosch, IVK (Internal Combustion Engines and Automotive Engineering) andFKFS (Forschungsinstitut fr Kraftfahrwesen und Fahrzeugmotoren Stuttgart) have beenworking on a natural gas hybrid vehicle, aimed at developing an NGV prototype emitting lessthan 90 grams CO2/km emissions. The primary goal is developing a prototype of a CNG-fueled parallel hybrid based on an Opel Astra Caravan with less than 90 grams CO2/kmemissions. In recent years two methods, namely downsizing and downspeeding, wereestablished on the market to reduce CO2emissions while maintaining the drivingperformance of engines with identical effective power but a larger displacement.Characteristic for both methods is the shift of engine operating points towards higher loadsand therefore to areas of better brake specific fuel consumption.

In the biomethane segment positive examples can be recorded as well. The German wastecollection operator BSR has started the construction of a biogas facility in Berlin. The newsite will be capable of displacing 2.5 million litres of diesel per year. So far, the company hasput into operations 93 CNG powered Daimler trucks, and plans to expand its fleet up to 140vehicles.

In SWITZERLAND (status March 2011) 23 different models of cars and 13 models ofdelivery vans and minibuses with natural/biogas engines were available. The number ofnatural/biogas fuel stations has grown to 126 and the total number of NGVs amounts toabout ten thousand. The average Swiss filling-station price for natural/biogas is around 30percent cheaper than petrol.

On the 2010 and 2011 Geneva Motor Shows Swiss Gasmobil exhibited concept car: the Fiat500 1.4 Natural Power Turbo with efficient engine technology and natural gas/biogas fuel. Itdelivers higher performance coupled with extremely low CO2 emissions and optimumefficiency. The 5-speed, 2-cylinder turbo delivers 62 kW/85 HP at a natural/biogasconsumption of only 2.9 kg/100 km and a climate-relevant CO2output of 72 g/km.

Environmental Car List of the VCS Traffic Club of Switzerland for the first time placed anatural gas vehicle (Fiat 500 natural gas-turbo MTA) on the first place.


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EASTERN EUROPE

BELARUSwith the total number of on-road vehicles of about 3.3 million has about 4600NGVs filled by 26 mother and 16 daughter stations. No incentives are of fered by the state.The development of NGVs in the country is supported by low prices for CNG: 0.19/ncmcompared to gasoline95: 0.66/l and diesel: 0.59/l.

In BULGARIALPG is already in saturation phase and has some tendencies to decline as acar fuel (opening the option for CNG as far as CNG is still not excised). 2% of total number ofregistered vehicles are NGVs (reached in 7 years), 99% retrofits but with increasing OEMmodels import. Oil and gas companies are introducing CNG at its petrol filling stations. Thetotal number of NGV is 61.2 thousand, the total number of CNG refuelling stations is 87.

CZECH REPUBLIC is well covered with the OEM CNG manufacturers and models present,both in the Light and Heavy Duty segment with the Tedom, SOR and Irisbus Iveco CNG

buses also manufactured locally. The Czech Republics government passed a resolution in2005 for the promotion of natural gas as an alternative fuel. The resolution aims to buildnatural gas up to 10 percent or all transportation fuel consumed by 2020, in line withEuropean White Paper on transport policy in effect at that time. That target would see400.000 CNG vehicles and 400 CNG stations in operation by 2020. Currently the CzechRepublic operates 50 CNG stations.

Skoda auto presented CNG prototypes in May 2007, but unfortunately, with no further stepstowards commercial production until now.

Police in Ostrava, the Czech Republics third largest city, have decided to switch half of their36 patrol vehicles to CNG operation. Skoda models, the Octavia and Fabia, have been

selected for conversion.For more detailed information on the Czech Republic situation see Appendix I concerning theGasHighWay Project.

In HUNGARYgas distributor for Hungarys capital city of Budapest, Fvrosi Gzmvek Zrt.(FGZ), has entered into a strategic agreement with MOL Hungarian Oil and GasCompany to install the citys first CNG dispenser at a public filling station. The first dispenserwas scheduled for opening in summer 2011 and may be fo llowed by installations at otherMOL stations. The company is aiming to increase public awareness of CNG as a vehicle fuelfollowing a successful pilot project launched in 2008. The initiative forms part of the FGZcorporate citizenship strategy for environmental improvements. The total number of NGV is300, the total number of CNG refuelling stations is 16.

The total number of on-road vehicles in MOLDOVAis about 540.495. The total number ofCNG filling stations is 24. The main operator of CNG filling stations is Moldovagaz. The gasrealization per year is about 5 mil nm3. The exact number of NGVs is unknown. No incentivesare offered by the state. The development of NGVs is supported by prices for CNG: 0.45/nm3, i.e. about half price of gasoline (1,047 /l) and diesel (1 ).

In POLAND crucial aspect of the use of NGVs is public transportation and vans that operateon a limited area. On February 2010 the Board of Directors Polish Oil and Gas Companydecided to accept the strategy for the POGC Capital Group for the development of thenatural gas market for the propulsion of vehicles. Currently (spring 2011) there is intensivework on the accepted document. Activities for support CNG sector in the regulatory area:application to the Ministry of Economy on maintaining a zero rate of excise duty; lobbyingactivities undertaken by the Chamber of the Natural Gas Industry in order to maintain a zero


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rate of excise duty; participation of representatives of POGC in the Inter-ministerial Group forthe competitiveness of the automotive industry at the Ministry of Economy; introduction offlexible CNG price by reference to wholesale price of diesel (order and acceptation withcomplicity with the Chamber of the Natural Gas Industry); a study of legal and fiscalenvironment in the CNG segment; obtaining a decision from Transportation TechnicalSupervision for allow unattended fuelling CNG and application to the Ministry ofInfrastructure for creation a CNG road sign. Actions to support CNG sector in the marketingarea includes cooperation with importers of cars (Fiat, Iveco, Mercedes, Volkswagen) andcooperation with the media in the promotion of CNG as a fuel. Characteristics of the mainstrategic objectives for future years: the increase in operating profitability in POGCframework in order to ensure long term viability of CNG segment within the Company interms of creating economic value; construction of new CNG stations for corporate clients inorder to ensure the strategic development of infrastructure for CNG in Poland, whichinternational experience has shown that in the long term can lead to increased use of CNGas fuel in road transport and increase the volume of sales of compressed natural gas and

CNG sales volume growth to drive revenue POGC either directly for the segment (CNGsales) and in the other areas (distribution).

In RUSSIA the following documents regulate NGV Market:

Resolution of the Government of Russian Federation 31 of January 15, 1993 Concept of Long Term Socio-Economic Development of the Russian Federation Till

2020 Approved by the resolution of the Government of Russian Federation 1663-rof November 17 2008;

Principal Directions of Work of the Russian Federation till 2020 Approved by theresolution of the Government of Russian Federation 1662-r of November 17 2008;

Federal Law On energy Saving and Building Energy Eff iciency, and Amendment ofAssociated Legislative Acts FZ 261 of November 23, 2009.

Directives of the Chairman of the Government of the Russian Federation Directive of the President of the Russian Federation Pr-1923 of June 27, 2011 Order of the Federal Service for Tariffs 412-/2 of December 10, 2010 On

Wholesale Prices for Natural Gas produced by JSC Gazprom and Its AffiliatedEntities, Traded to Consumers in the Russian Federation (except for private citizens).

NGV advocates in Russian industries, Government and Parliament are drafting the federallaw on the use of gaseous transportation fuels to support natural gas and LPG markets.The Government Resolution of 1993 sets the upper limit for the retail price of CNG at the

filling station. It shall not exceed 50% of the regional retail price for the lowest grade gasolineA-76. It is a very encouraging incentive: In August 2011 natural gas for vehicles costs 2 3times cheaper than diesel or gasoline. No other economic or administrative incentives areenforced in Russia.In the Russian Federation there is no single document that would regulate projection,construction and operation of CNG or LNG filling station. There are about 400 plus norms,standards and code of practice that have to be taken into account during the construction ofnatural gas filling facility.The lack of national Law and appealing incentives is one of the reasons why Russian vehiclemanufacturers are not very much encouraged to invest into OEM supply of NGVs. However,KAMAZ Russian leader and champion in commercial truck production (10 times winner ofParis-Dakar Rally in trucks category) has designed a CNG chassis that is used for a broad

range of NGV applications: trucks, garbage collecting, buses and other.


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transport on environment and health of the population of Moscow by expanding the use ofCNG as a motor fuel in the city. Practical implementation is underway, facilitated by anearlier decision by the Moscow government which introduced alternative motor fuels for roadtransport to the city. Areas for potential investment are: building CNG/LNG filling stations;assembly / construction of OEM NGVs; manufacturing high pressure cylinders and setting uptransportation companies (taxis, buses, trucks) that use NGVs. The key points of theResolution are: social facilities (hospitals, kindergartens, schools) shall be served by Euro-4vehicles or CNG vehicles; electrical and CNG trucks vehicles will be exempt from the ban toenter the central area of Moscow; communal vehicles in the central are of Moscow shall usealternative fuels (CNG, electric power), multifuel filling stations in Moscow, where CNG makeno less than 30% of the overall fuel sales, and automotive companies, where no less than50% of the fleet are vehicle powered by alternative fuels (CNG and electric power) may getat least 5-year land tax holidays; six Moscow bus companies will switch to CNG; 21 sites areapproved for construction CNG filling stations; filling stations without CNG options will not beallowed in Moscow; a Moscow law on the Use of Alternative Transportation Fuels will be

developed; electrical and CNG trucks vehicles will be exempt from the ban to enter restrictedtraffic zones; Government of Moscow intends to begin OEM production of NGVs in the city;Moscow NGVs will be used to serve the XXII Olympic Winter Games in Sochi, in February2014 and biomethane from sewage water and landfills will be produced in Moscow.

Stavropol Krai, a federal subject located in Russias south-west is running a regional programcalled The use in the Stavropol region

2012 Final Igu Un Ece Ngv Report 2012

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Transcript of 2012 Final Igu Un Ece Ngv Report 2012